Tips for banking novices

Most people have had some form of experience with a bank. Whether you have a debit or credit card, you have likely chosen a bank to deal with for the foreseeable future.

Traditional banking in the eyes of many can come across as a little old fashioned, but with a new age of online banks coming into the spotlight, the relevance of using the right bank is as important as ever.

Here, we look to discuss some of the ‘traditional’ tips to consider when dealing with their own bank or are looking to move over to a new account.

Credit unions are worth considering

Credit unions function in much the same way as a bank does, but also have some additional benefits. A commercial entity in a bank has a primary aim to turn a profit. Of course, this is the aim of most businesses and is understandable, but ultimately the customer does suffer because of this.

Credit unions are not-for-profit that hire financial experts to maintain the accounts and money of a bank. A credit union therefore tends to have better perks and rates of interest. The difference here as well is that credit unions do not invite investors from a global stage and focus on the community instead, supporting this ability to focus on great rates over what some would consider a banks greed!

Understand the fees

It is well known that banks have long contracts that come with the opening of a new account, and it is important that you check these.

Fees for overdrawing on an account or not meeting the minimum on your credit card can soon stack up. Some banks even charge you for setting up an account, but rates of interest on these accounts can be lower.

Make sure you are fully aware of what you are getting into when opening an account and shop around for the best account for you.

Double check the overdraft fees

Touched on already, a common problem encountered when dealing with banks is the fees added on. Sometimes these can be higher than the amount you even went over.

Many banks do offer overdraft protection, however. Banks will all have different ways of managing the fee structure for overdrafts, so make sure this is something you are comfortable with and has been negotiated with your bank. If you are not sure of the existing fees of your overdraft on your current account, this is also something that needs clarification.

Focus on digital

This is something that every bank user should be aware of. Firstly, most traditional brick and mortar banks offer online banking, coupled with an app for convenient and easy access to your money. If you are not already utilising online banking, you really should be. It is vital when it comes to budgeting well and gives you a clearer picture of your bank balance to allow you to avoid the aforementioned overdraft fees.

On top of this though, we are seeing a rise in online banks. Without brick and mortar, these online banks are slowly eating into the banking space and are widely forecasted to be the future of banking. Operating in multiple currencies and providing real-time exchange information, the convenience represented with these banks is something to consider when looking into a new bank for personal and business use.

There is still a place for physical banking

Whilst there does appear to be a shift to online, many still see the value in the ability to walk in and talk to someone, this is relevant across many financial fields.

If this is something you value, make sure to choose a bank that has a branch located near you. Before signing up, head into the branch and have a real talk with one of the financial experts and clearly cite what you require. Discussing things such as loans and interest rates is easier to do with someone in front of you.

As the world turns to cards and increasing people switching to digital banking, there are many things, particularly for the older generation, that we need to catch up on. Knowing the fees and determining what is right for you is the best thing you can do before opening your account. If you do not know something, don’t be afraid to ask!